Financial markets are

Question

Quizplus · Accepted Answer

Financial markets refer to markets where funds are mobilized from people who have surplus funds to people who are in need of funds. These markets include stock markets, bond markets, money markets, foreign exchange markets, etc. They facilitate the exchange of financial assets and play a crucial role in the allocation of capital in the economy. Option A is incorrect because the Fed engages in open market operations to influence the money supply, not to trade money with economic agents. Option C is incorrect because bank reserves are traded in the interbank market, not financial markets. Option D is incorrect because financial markets deal with financial assets, not physical assets like capital goods.

Financial Markets Are